KUALA LUMPUR (Jan 19): Shares in Tenaga Nasional Bhd advanced in morning trade today, after the nation’s largest electricity utility updated the imbalance cost pass-through (ICPT) rebate should not eat into its earnings.

At 10.40am, the counter was up 10 sen or 0.64% at RM15.70, after some 3.54 million shares were exchanged, giving it a market capitalisation of RM88.96 billion. It last closed 1.4% down at RM15.60.

The Energy Commission said the announced RM929 million ICPT rebate of 1.80 sen per kiloWatt hour (kWh) for the period of Jan 1 to June 30, 2018 will be borne by TNB via savings from unused expenditures of around RM2.5 billion which was approved in Regulatory Period 1 (RP1).

In a note released by CIMB research, the management was quoted as saying no material impact on its earnings is expected from the ICPT cost, as it has made adequate provisions on the savings from the financing cost and depreciation of the unutilised expenditures throughout the RP1 period.

"We keep our 'Add' call on Tenaga as we believe its current undemanding valuation was largely due to the uncertainty over the tariff review for RP2," the research house said, reiterating its target price (TP) at RM17.60.